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Rise of Design Consultants

Should integrators worry or embrace the growing trend of homeowners hiring third-party design firms directly, then putting systems out for bid?


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What Do Consultants Do?
Bob Kranson of Axiom Design in Pleasanton, Calif., is not new to this realm. In fact, he has been doing design and software for homeowners for 20 years. At any given time, he has 20 to 30 jobs ongoing in various stages.

“All of my clients are homeowners,” says Kranson, who adds his large-scale systems typically include design, construction and software services. “Integrators are usually competent in one or more of those areas, but rarely in all three. And they are not likely to maintain proper margins in all three areas.”

Axiom’s primary roles as a consultant are to educate the customer about what technologies are available and the risks/rewards from each option, and to produce engineering documentation.

“I am just like an architect,” say Kranson. “Technology without a plan is more likely to become a science project versus a construction project. At some point, the custom installation industry has to realize that products are a commodity, and service is the differentiator. End-users are becoming more savvy about what they want and don’t want. Dealers need to recognize that their service is the value-add, not products.”

Mark Sipe of Prime Industrial Design only recently joined the consulting world. Sipe and his wife, Susan, run several companies in the custom installation space, including X-Spot, Abacus Prime Consulting and SalezToolz software.

Last year, Sipe was contacted by a long-time friend to manage the design and construction of a massive 28,000-square-foot, $20-million home in Paradise Valley, Ariz. The trials and tribulations of the job have been documented on cepro.com, as Sipe has faced budget issues, an intrusive homeowner and unforeseen problems - namely the architectural firm folding and the integration company being purchased. But through it all, the job is progressing, and Sipe sees consulting roles continuing to gain momentum.

“This is absolutely a growing trend,” he says, noting that he has recently been hired to oversee the technology implementation in a 180-home community in Mexico.

Firefly Design Group in Hollywood, Fla., has seen its revenues migrate from only 5 percent from homeowners in 2009 to 50 percent in 2011. In a six-week span this spring, the company awarded $7 million worth of homeowner-driven projects to integrators.

“Generally the people who are hiring us have already been through multiple integrators. It is usually not their first house with automation, and they are seeking an alternative,” says Ron Callis, president. “They use us because we are brand agnostic. They know I’m not trying to sell them product because it is sitting in my warehouse.”

The primary services Firefly provides are: discovery, design, construction documentation, bid management and construction management.

“We don’t necessarily design better systems than an integrator can,” admits Callis. “I’m just giving the client an experience that he desires. Meanwhile, the integrator is getting a job handed to them once they have competed with a couple other dealers. Firefly doesn’t make any percentage on those jobs. I have no stake in which integrator gets selected. All the bids are sealed and sent to the client [who is an architect in many cases.]”





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About the Author

Jason Knott, Editor, CE Pro
Jason has covered low-voltage electronics as an editor since 1990. He joined EH Publishing in 2000, and before that served as publisher and editor of Security Sales, a leading magazine for the security industry. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He is currently a member of the CEDIA Education Action Team for Electronic Systems Business. Jason graduated from the University of Southern California.

17 Comments (displayed in order by date/time)

Posted by BigPapa  on  09/14  at  02:44 PM

I have little fear of this trend spending a good bout of my career in commercial. My issue with consultants, the biggest one, is selling their value proposition at the expense of the integrators, and at worse, using FUD against those integrators to increase their value.

I don’t have a warehouse: I’m a custom integrator and don’t dump product that is convenient for me at the cost of serving the client. Equipment margins are not something to hold against us.

Likewise, the client is not best served by being offered every possible speaker out there. There are so many good products that it seems a false pretense to offer ‘the best of AMX or Crestron or C4 or Savant or Elan or xxx’ to every client ‘since we are not dealers of any of those lines.’

If consultants manage the client and accept culpability in the project, accepting the commensurate risks involved with taking point, then I have no problems working with the consultant. I make less $, but my risk and workload is reduced. Not exactly a net loss there. 

If the job gets done properly, the client is served, my $ is commensurate with my efforts and risks, then consultants can be a positive solution. As long as they contribute.

It’s when their contributions come at the expense of my efforts I have a problem.

Posted by Mark Sipe  on  09/15  at  09:15 AM

I don’t see my job as saving the client money but rather getting a good value for monies spent.  Every client is different and my job is to satisfy their unique needs. 
Consultants have a place if only to help find the best talent in a market and sort through the different technologies being offered. 
We support both the owner and CI to create a home everyone can be proud to show and live in.  The CI should have made a fair wage and profit while the clients consider the value they received in return.  This is all business 101, consultants are just guides through the world of electronics, we know the risks and rewards.

Posted by BigPapa  on  09/15  at  09:32 AM

On those terms Mark, I have no issues. That works with me and your vision can exist with mine.

Again, if I come to a project that’s already been designed, the client has already put their input in, and the project is ready to go, and the loss of my income correlates to the loss of outlay and risk, I’m still coming out fine. If the job gets done right and the client is happy then I’m satisfied too. So I made 15% less on the project, but I worked 15% less and my risk is reduced 15%. I can just work on 15% more projects.

I am familiar with Bob’s company and would not shy away from being a selected subcontractor on that project. I know a firm he’s subbed to and they are happy to work on his projects. I’d be stupid not to take a crack at it.

My only issue (I’ve said this once or twice, heh heh) is selling the consultant value proposition at the expense of the installing company. There are lots of positives you guys can sell to so be careful about overselling on the negatives.

Other than that, go out and get some clients, make the designs reliable, and send me the RFP’s. I’ll carry the baton to the end.

Posted by John Eppes  on  09/15  at  09:34 AM

Consultants absolutely have their place. They support and protect their clients by insuring not only that clients wants are met, but their needs as well. All too often installers and salespeople pretending to be consultants are only pushing their “cookie cutter versions” of technology. This is not always a problem, but how does a client know the difference. True Consultants are not product affiliated and have no other horse in the race. Good consultants stay on top of current technologies and the myriads of products that may support them. Striving only to provide their clients wanted “end result”. While some installers and salespeople may factually only want the best for their customers, the bad ones don’t wear signs and its always a good thing for the customer to have someone on their side that can find the difference.

Posted by Ron Callis  on  09/15  at  11:10 AM

Thanks for writing the story Jason. Consultants have been used for decades in the commercial AV industry and are only now starting to gain “some” traction in the residential space. The percantage of jobs that get designed this way today would have to be much less than 1%. For some clients it is the right way to go. Consultants are from being a risk for ESC’s at large.

I would never stand on the side of the argument that presents “we” conultants do it better than integrators as a whole. There are great ESC’s that spend a tremendous amount of time and attention to the needs analysis phase and design phase of the project. There are others that can spend 20 minutes with someone and think they know exactly what is right for them. Like many businessess there are great integrators and less than great integrators.

For a homeowner to work directly with a consultant is simply a “new” option that hasn’t been brought to light until now. ..of course I am sure Axiom would disagree with this comment, as they have been providing consulting services for many years.

If you would like to learn more about us, please visit:

http://www.firefly-designgroup.com

Posted by Mark Sipe  on  09/15  at  11:19 AM

Seems as though the CEPro article has opened Pandora’s box.  Axiom has been doing this for a long time and a number of others.  None of this is new but now that the light is shining on us people are paying attention. 
I have had integrators ask me to get involved when some of the competitors aren’t fully disclosing the differences in systems, sometimes we can umpire the bidding process to sort out the options.  Consultants don’t just serve the client, we serve the project for all parties.

Posted by David VanWert  on  09/15  at  11:08 PM

I also operate a design/consulting company here in Los Angeles. One benefit we find is for the GC and architect for the project.

One complaint that I have heard from more than a few GC’s and architects is that there is very little process when it comes to the design and bidding of technology for the home.

They feel it is a great benefit to their projects as there is now a concise plan that can be followed and bid from.

Companies such as Axiom are already doing a great job of this in my area and we feel it benefits the clients as well as integrators. 

Alot of integrators we work with on projects really like the fact of a designer or consultant as now the system and company is commonly chosen based on the value that the company brings to the table as well the rapport established with the client.

As mentioned by Axiom Design in the article bids being submitted for the project are extremely close, which we find to be true as well. This is a great thing as it is eliminating “low ball” bids or “trunkslammers” as the clients are not focusing on price as much and more the best company and solution for their project.

David VanWert
http://www.vanwerttechdesign.com

Posted by Paul Self  on  09/16  at  06:34 AM

I suggest that our industry has a history of not delivering a system that really works. This is due to a lot of reasons, but I am not going to point fingers (you know who you are)! After 20+ years as an industry, there are consumers with experience (bad experience) and they are learning that that need their own advocate. The design firms need to focus on a solid programming document and definition with budget expectations. If they provide this service as the client’s advocate, then it is worth every penny.  When the schematic and construction documentation phases happen, then the design solution will be very obvious to anyone bidding on the project. Most dealers do not intentionally go through a programming phase and charge for this work like an architect or designer would (this is not control system software). Most dealers forge ahead and create a grocery list of gear that could do almost anything. Without a proper programming definition, the project drifts and meanders into a poor to mediocre result. Just an observation……..

Posted by Ron Callis  on  09/16  at  09:51 AM

@Paul Self

Well said. When ESC’s slow down and take the time to do a thorough needs analysis and project scope definition along with a programming scope definition, the design is more accurate and all parties have a much better chance of being on the same page. The result is a very happy client and an ESC that probably got paid for all services rendered.

My experience has shown that some salespeople are busy producing a parts list for the sake of having something for the customer to purchase. Meanwhile these parts of then handed to a project manager or staff designer that must then actually figure what the saleperson promised the customer. I can become a mess really quickly.

Posted by Andrew Southern  on  09/16  at  11:17 AM

Paul,
I am basically doing this because of the dreaded ‘parts list’ phenomenon. All too often a client walks into two stores, explains what they want, and gets a list of SKUs and prices with no Scope or anything. If you look over the two competing parts list they are ALWAYS providing some different functionality. This is mostly because the client is not versed in the language to explain what they want the same way twice. It is also partly due to the ‘typical systems’ integrators propose after years of selling the same systems. Neither is wrong, but both are missing pieces to the puzzle.

After all that confusion, the client is supposed to sign and give a deposit. It is the strangest way of working!

I wanted to help define the goals early and explain what is available (maybe a Sonos system & network is all you really need in that vacation home), draw up the design, explain the process & budget, and then bring the qualified clients to bidding vendors. Once the project is rolling, there is no reason the Integrator should have to visit the site each week to ensure it’s ready for them, I can visit and give them updates. They should be working on other projects. In end the client get a system that is right for them and the Integrator has won a bid that is fair and quick to finish.

Posted by Ron Callis  on  09/16  at  11:45 AM

I want to give a quick thanks to Crestron for doing such a great job in supporting their Consultants.

Consultants can sign up to get listed and gain access to support via this weblink:
http://www.crestron.com/partnerships/consultant_uplink/

We find that many manufacturers that solely service the Resi space have no idea what a consultant does and why they should provide any product details or support other than what is listed on their website. We find it very frustrating when we are working with a homeowner or more likely, working with an ESC that utilizes product X and manufacturer of product X won’t answer our questions or provide any support to my designers. Seems silly and short sighted. Curious what the other consultants have experienced…

Posted by David VanWert  on  09/16  at  12:26 PM

@Ron Callis,
I agree, trying to get manufactures (especially being a new business) to help with any type of information or tools to help specify their products has proven to be very difficult.

I agree Crestron has been a great help so far as being a certified consultant you are able to order literature, review pricing, attend ongoing training (which is great!).
The guys at Lutron and SpeakerCraft, have also been a pretty good about lit and updates and training for designers/consultants.

Hopefully, more manufacturers will follow suit and make our role on these projects a little more seamless and help the manufactures sell more, as well as the ESC’s selling, installing, and programming the systems.

Posted by Petro  on  09/16  at  04:08 PM

Hmmm…reading Jason’s article about Security dealers being the first choice for a consumer to install home technologies and now reading this article, I wonder if more CI dealers will migrate to consulting gigs as a way to round out revenue….

Would love some comments from our CI installer friends about that. What do you guys think?

Posted by Mark Sipe  on  09/17  at  07:03 AM

Grass is always greener, good luck with that.

Posted by BigPapa  on  09/17  at  12:44 PM

Grass is greener? Maybe I should be a consultant LOL. You hiring Mark?

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